organization (one)

8/13/2019 Organization (One)

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Organization Organization consists of two or more persons who work together to

achieve a common purpose.

It is a deliberate arrangement of people to accomplish some specificpurpose.

Each organization has a distinct purpose. This purpose is expressed

in terms of a goal or set of goals that the organization hopes toaccomplish.

Each organization is composed of people. One person working aloneis not an organization.

An organization can be defined as the means by which managementcoordinate the efforts of employees and other resources to achieveobjectives.

It is the formalized and intentional structure of positions.


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Organization needs people and peoplealso need organization.

All organizations develop some deliberatestructure so that their members can dotheir work.

Organization may be formal and informal.

The informal organization is a network ofpersonal and social relationships. It is not

planned or official. It may be flat and tall.


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Each organization has a distinct purpose.

Organization is composed of people. One person

working alone is not an organization.

All organizations develop some deliberatestructure so that their members can do their

work. The structure may be traditional or open and

flexible.

There us a division of labor. It is breaking downthe jobs into narrow and repetitive tasks.

There is a coordination among the tasks divided.


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The concept of organization is changing.

Why are organizations changing?

Because the world around them has changed andcontinue to change.

Societal, economic and political and technologicalchange have created an environment in which successfulorganizations must embrace new ways of getting work

done.

Traditional organization is different from thecontemporary organization.


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Principles of organization

The higher authorities are responsible for the actsof their subordinates. Authority can be delegated but not responsibility.

The responsibility and authority of each

supervisor should be established clearly and inwriting.

The principles of specialization should be appliedwherever possible.

Organization must be flexible so that it can be

adjusted to any situation.

Continuity must be maintained in theorganization. It must be consistent.


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Authority must be equal to responsibility. The line function and staff function should

be kept separate

The span of control should be reasonableand well established.

Downward delegation of authority but not

of responsibility. The organization should be simple and

flat.


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Benefits According to Chandan (1996) a good organization

produces a good number of benefits. A good organization facilitates attainment of objectives

through proper coordination of all activities.

Conflicts between individuals over jurisdiction are kept tominimum.

Eliminates overlapping and duplication of work. Decreases likelihood of run- around. The run-around occur

when we do not know who is responsible for what.

Facilitates promotion. It aids wage and salary

administrations. Communication is easier at all levels of the organizational

hierarchy.

Increased cooperation and a sense of pride.

Encourages creativity.


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What is Organizing?

Organizing is a process involving few steps: Identifying and classifying activities of an organization.

Grouping the activities. It is called departmentalization.

Assigning authority and responsibility of each department to

a manager who is accountable for its performance.Authority is the power that ahs been legitimized by theorganization. Responsibility is the obligation to carry outcertain tasks.

Establishing reporting relationship between position. Two

issues are involved: Chain of command and span ofmanagement. Chain of command is a clear and distinct lineof authority among the positions in an organization.

Coordinating the activities. It is the process of linking theactivities of the various departments of the organization.


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Steps in Organizing

Creation of departments.

Allocation of duties.

Establishment of reporting relationships

Delegation of authority.

Coordination of activities.


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Departmentalization

Grouping jobs according to some logical arrangement is

called departmentalization over which a manager hasauthority for the performance of specified activities.

Grouping jobs together so that common task can becoordinated.

The basis by which jobs are grouped together is calleddepartmentalization.

Common bases for departmentalization are

function,

product, customer

location,

time.


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Functional departmentalization.

Grouping jobs involving same activities is calledfunctional departmentalization.

Examples are production, finance and manufacturingdepartments.

Each department is staffed by experts in thefunctional area.

That is, it follows principle of occupationalspecialization and economy of scale.

It provides means of tight control at the top.

Coordination of activities inside each department is easier.

Decision tends to become slower and more bureaucratic.

Accountability and performance become difficult to monitor.

It de-emphasizes overall enterprise objectives.

This kind of departmentalization makes it difficult to adapt

quickly to environmental changes.


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product

departmentalization. Grouping and arranging activities around product is called

product departmentalization.

All activities associated with a product can be easily integratedand coordinated.

The speed and effectiveness of decision-making are enhanced.

Performance of the individual products can be easily assessed.

But it requires more persons with general manager abilities.

There is a danger of increased costs through duplication ofcentral service and staff activities.

It also presents increased problems oftop managementcontrol


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customerdepartmentalization

Grouping activities to respond to and interact with specificcustomers is called customerdepartmentalization.

Apexs computer business has two distinct departments-industrial sales and consumer sales.

Organizations are able to use skilled specialists to deal with

unique customers.


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Location departmentalization

Location departmentalizationgroups jobs on thebasis of defined geographical sites or areas.

It enables the organization to respond to easily to

unique customer and environmental characteristics inthe various regions.

It places emphasis on local markets and problems. Itimproves coordination in a region.

It takes advantages of economies of localoperations.

Drawback is the requirement of a large administrative

staff to keep track of units in scattered locations.


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Departmentalization by time

Departmentalization by timeis grouping activities on the basisof time.

The use of shifts is common in many enterprises where foreconomic and technological reasons the normal workday will notsuffice.

It is highly used in hospitals


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ProcessDepartmentalization

Manufacturing firms often group activities around aprocess.

In this kind of departmentalization people andmaterials are brought together in order to carry out a

particular operation.

It achieves economic advantage, uses specializedtechnologies and utilizes special skills.

But coordination of departments is difficult and is

unsuitable for developing general managers.


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Span of control

On the other hand, with too littlesubordinates, managers are underutilizedand tend to supervise excessively, giving little

discretion. The span may be narrow (with few subordinates

per manager) or wide (with many subordinates).

The narrow span results in a tall organizationwith many layers or levels of management and

wider span leads to flat organization


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A. V. Graicunas quantified span of management.

He noted that a manager has deal with three kinds ofinteractions with and among subordinates:

direct (the managersone to one relationship with eachsubordinate),

cross (among the subordinates themselves) and

group (between groups of subordinates.

The number of possible interactions of all types betweena manager and subordinates can be determined by thefollowing formula:

I= N {2N/2+(N-1)}

Where I is the total number of interactions with andamong subordinates and N is the number ofsubordinates. If a manager has two subordinates, sixpotential interactions exist.


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The narrow span results in a tall organizationwith many layers or levels of management

and wider span leads to flat organization.A flat organization structure leads to higher

employee morale and productivity.

It improves organizational communicational

network, which allows managers to stay intouch with a large number of subordinates.

Business can function more effectively with

fewer layers of management.


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But the wide span requires exceptional quality ofmanagers.

The superior may lose control and there may

occur delay in decision- making. A wide span of management in a flat

organization may increase more administrativeresponsibilities because there are few managers

but there are many subordinates reporting toeach manager.


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A tall structure is more expensive becauseof larger number of managers involved.

High costs due to many levels. It also fosters more communication

problems. Multiple levels complicatecommunication. Omission andmisinterpretations occur as informationpasses down the line.

Excessive distance between lowest level

and top level. Numerous levels complicate planning and

control.


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Downsizing and restructuring

Because of problems with tall structures, manycompanies have downsized.

Downsizing is a process of significantly reducing middle

management layers, increasing spans of control andshrinking workforce size for better organizationalefficiency and effectiveness.

Restructuring is a process of making a major change in

organization structure involving reducing managementlevels and possibly changing components of theorganization through divestiture and acquisition, as well

as shrinking workforce size.


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Factors affecting optimum span

Competence of supervisor and subordinates (the greaterthe competence, the wider the span).

Physical dispersion of subordinates (the greater thedispersion, the narrow the span).

Physical proximity. Extent of non-supervisory works in managers job.

Degree of required interaction.

Extent of standardized procedures,

Similarity of tasks being supervised,

Frequency of new problems,

Preference of supervisors and subordinates


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Delegation of authority Delegation is the process by which manager assigns a

portion of his workload to others. It is the assignment ofauthority and responsibility for the completion of specifictasks to subordinates.

The chief executive cannot perform all the tasks of the

organization himself, so he must share his duties with hisimmediate subordinates, who in turn delegate to theirsubordinates and the process continues until all activities areassigned to persons who are made responsible forperforming them.

The delegation of a specific task means that the manager isstill responsible for the accomplishment of the overall task.


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Reasons for delegation

The main reason for delegation is to enable the managergets more works done.

Subordinates help ease managers burden by doingmajor portions of organizations tasks.

A subordinate may have more expertise in addressingcritical problems than a manager does.

Delegation also helps subordinates.

It may improve their managerial skills


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Delegation process

The delegation process involves three steps.

Assigning responsibility or giving the subordinates a jobto do.

Granting the subordinates the authority to do the job.

Creating or establishing the subordinatesaccountability-that is, the subordinate accepts an obligation to carryout the task assigned to him.

He must be accountable to the boss for finishing


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Merits of delegation

Delegation gives executives more time for strategicplanning and policymaking.

Delegation is a motivational factor. Employees becomemore satisfied and committed when they are given an

opportunity to tackle significant problems.

Delegation can expedites innovation.

Delegation can be a training ground for executive ability


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Problems in delegation

A manager may be reluctant to delegate.

Fear of being called lazy. Delegation may revealmanagerial shortcomings.

Low self-confidence. Some managers may worry that

subordinates will do too well and pose a threat to theirown advancement.

They have a tendency to want do things personally.

Managers have a desire to dominate.

Managers may not trust the subordinate to do the jobwell. They hold that subordinates are incapable of usingauthority properly.

Poor example set by bosses who do not delegate.


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Some subordinates are reluctant to accept thedelegation because failure may result in a

reprimand. They may feel that there is no reward for

accepting additional responsibility.

They may prefer to avoid risk and want theirboss to take all responsibility.


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Decentralization and Centralization

In general, the amount of delegation in the organization

refers to the degree of decentralization or centralizationin the organization.

The degree of centralization of a firm will affect the span ofmanagement.

Decentralization is the process of systematically delegatingpower and authority throughout the organization tomiddle and lower-level managers. It is the delegation ofmany tasks and of the associated authority tosubordinates throughout the organization.

A decentralized organization is one in which decision-making power and authorities are delegated as far downthe chain of command as possible.


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Centralization, on the other hand, is the processof systematically retaining power and authorityin the hands of higher-level managers.

It tends to concentrate decision-making powerat the top of the organization.

What factors determine the degree of

centralization or otherwise? These are: Missions and goals of the organization,

organizations external environment, the historyof the organization, size and complexity of the

organization, competency of top levelmanagement, competency of subordinates andlocation of target market.


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Advantages of decentralization:

Stresses delegation of decision-making and thus lightens

the load of top managers.

The development of generalists rather than specialists isencouraged. People develop more under a decentralizedarrangement.

Delegation leads to prompt actions and quick decisions.

Provides foundations for development of future executives. Intimate personal ties and relationships are promoted,

resulting in greater employee enthusiasm and coordination.

Risks involving possible losses of personnel, facilities and

plans are spread out.


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. Conflicts between Line and Staff

Brown and Robert (1984) have identified a good number of factorsthat cause conflicts between line and staff personnel.

Since staff generally advises and the line decides and acts, the staffoften feels powerless.

Staff provides advice and the line managers may resist an ideabecause they did not think of it in the first place, which hurts theirego.

Staff employees may be resented because of their specialized

knowledge and expertise.

Staff has easier access to top management, which is resented by the

line management.

Line is action-oriented, staff studies in depth.

Lines seek simple solution while staff complicates the situation indetail.


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Staff has easier access to top management,which is resented by the line management.

Staff is generally younger and more educatedand hence their idea may be more theoreticaland academic rather than practical.

There is a conflict about the degree ofimportance between the line and staff as far asthe contribution towards the growth of thecompany is concerned.

The line usually complains that if things go right,then the staff takes credit and if the things gowrong, then the line gets the blame for it.


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Line and staff positions

Line Position has authority and responsibility forachieving the major goals of organization. It hasauthority to give order and to make decision.

Staff position has the primary purpose of giving

line positions specialized expertise andassistance.

Functional authority. Staff departments havefunctional authority- authority over others in theorganization in issues related directly to their

respective functions.


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Power VS authority

Power is much broader concept thanauthority. power is the ability ofindividuals and groups to induce or

influence the beliefs and actions of otherpersons or groups.

Authority is power in an organizationsetting. It is the right in a position toexercise discretion in making decisionsaffecting others.


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Management VS organization

Refers to activities thatlead to get things doneby people.

It has many functions like

planning, organizing,leading and controlling.

It can not be effectedunless organization isbuilt up.

It is compared withhuman which hasdifferent organs.

Refers to the divisions ofvarious activities andintegration of them.

It is one of the functions

of management.

It is regarded as the partof mgt process.

It is compared with the

organs of the humanbody.


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Formal VS informal organization

Official.

Authority adresponsibility.

Main focus is on position

Power is delegated bymgt.

Rules guide behavior

Source of control: rewardand punishment

Unofficial

Power and politics.

Focus in on person

Power is given by group. Norms guide behavior.

Sanctions.

organization (one)

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